US States Rush to Make Online Casino Legal |
Online casino legal status in the United States currently remains limited to just seven states, despite the massive potential for tax revenue and regulated gambling. As we look toward 2025, New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut, and Rhode Island are the only jurisdictions where players can legally access digital slots and table games.
However, the landscape of online gambling USA is rapidly evolving. Several states are actively pursuing legislation to join the ranks of online gambling legal states before the end of 2025. Importantly, Maryland's Delegate Vanessa Atterbeary has introduced House Bill 17 to regulate online casinos with potential revenue directed toward education and horse racing. Meanwhile, Virginia has a promising bill proposing a 15% tax on operators' adjusted gross revenue. Furthermore, what states allow online gambling may soon include Florida, where the Seminole Tribe is considering expansion following their successful sports betting implementation. Illinois legislators are also revisiting online gambling laws to address budget shortfalls, with proposed tax rates between 12% and 15%. Consequently, the $35.21 billion projection for the online gambling market by 2029 has created unprecedented momentum for legalization efforts across multiple states.
Maryland pushes HB17 to ballot despite Senate delays
Maryland lawmakers are making a decisive push to join the ranks of online gambling legal states through House Bill 17 (HB17). Spearheaded by State Delegate Vanessa Atterbeary, this legislation aims to establish a comprehensive framework for internet gaming operations across the state. The bill has advanced through initial hearings despite facing Senate delays similar to previous attempts.
Bill proposes regulation under Maryland Lottery
HB17 designates the Maryland State Lottery and Gaming Control Commission as the primary regulatory authority for all online casino activities within the state. Under this framework, the Commission would issue licenses to qualified applicants and establish consumer protection standards. Specifically, the bill allows existing video lottery operators and sports betting facilities to apply for internet gaming licenses, with five additional licenses available for applicants meeting social equity conditions. The financial threshold for entry includes a $1 million initial licensing fee, with five-year renewals costing 1% of an operator's average annual revenue.
Revenue earmarked for education and horse racing
The fiscal motivation behind HB17 is substantial, especially considering Maryland's projected $2.7 billion budget shortfall anticipated in 2026. The legislation proposes a 15% tax on gross gaming revenue, primarily directed toward public education through the Education Trust Fund. Currently, Maryland's education initiatives already receive significant gaming contributions, with $600.7 million directed to the Education Trust Fund from casino revenues in fiscal year 2024. Additionally, the bill allocates funds to support the state's horse racing industry through both the Purse Dedication Account and the Racetrack Facility Renewal Fund. One percent of tax proceeds would also be earmarked for problem gambling initiatives.
Referendum required for final approval
Unlike standard legislation, HB17 cannot become law without explicit voter approval. The bill requires a statewide referendum, likely in the 2026 general election, where Marylanders will decide whether to expand commercial gaming to include internet operations. This referendum requirement reflects Maryland's constitutional approach to gambling expansion. Notably, last year's similar bill passed the House but stalled in the Senate amid concerns about potential cannibalization of retail casino revenue. The Maryland Lottery has actively supported regulation, pointing to a 2023 report estimating the state loses approximately $197 million in tax revenue annually to illegal online casino gaming.
Virginia tables SB827 for further study amid cautious optimism
Virginia's approach to online casino legalization reflects a careful balance between economic opportunity and social responsibility. Recently, a significant legislative initiative has emerged that could potentially expand online gambling legal states to include the Old Dominion.
Senator Locke introduces bill with 15% tax rate
State Senator Mamie Locke pre-filed Senate Bill 827 (SB827) in late 2024, aiming to authorize internet gaming throughout Virginia. The proposed legislation designates the Virginia Lottery Board as the regulatory authority for the industry. Under this framework, Virginia's four existing casino operators would be eligible to acquire licenses, with each permitted to offer up to three online casino platforms. The financial barrier to entry includes a $1 million application fee for a five-year digital license.
In fact, the bill proposes a 15% tax on adjusted gross internet gaming revenue. This rate strategically positions Virginia's potential market to be competitive with other online gambling legal states while generating substantial revenue. The tax structure allocates funds between two primary destinations:
- 97.5% directed to Virginia's general fund
- 2.5% earmarked for the Problem Gambling Treatment and Support Fund
Proposal includes responsible gambling measures
SB827 incorporates comprehensive safeguards to mitigate gambling-related harm. The legislation mandates age verification systems to ensure only individuals 21 and older can participate. Additionally, operators must implement geolocation technologies to confirm that bets originate within Virginia or authorized jurisdictions.
The bill allocates a portion of tax revenue specifically for responsible gambling initiatives. Accordingly, these funds would support education about gambling risks and provide resources for vulnerable individuals. This approach aligns with recommendations from the National Council of Legislators from Gaming States.
Bill paused for impact assessment
Nevertheless, Virginia's journey toward online casino legalization has encountered a temporary roadblock. The Senate Committee on General Laws and Technology has "passed by indefinitely" on SB827 with a unanimous 12-0 vote. Subsequently, Senator Locke requested additional time for comprehensive research, acknowledging the need for thorough analysis before proceeding.
Ultimately, the proposal is now expected to be reintroduced for consideration by 2026. Concerns about potential impacts on existing Virginia Lottery revenues have prompted lawmakers to request further study from the committee's work group.
Florida explores tribal-led expansion into online casinos
The Seminole Tribe of Florida stands at the forefront of potential online casino expansion in the state, following their successful implementation of sports betting. As the tribe evaluates expanding its digital gambling footprint, Florida could join the limited roster of online gambling legal states through a unique tribal-led approach.
Seminole Tribe may leverage sports betting success
The tribe's online sports betting operation, launched in late 2023, has already generated substantial revenue. Florida's share reached $357 million from December through May, with state economic forecasters predicting revenue sharing from tribal gambling could total $4.4 billion through this decade. The Seminole Tribe operates one of the most profitable gaming enterprises worldwide, having pioneered high-stakes gaming with the first such bingo hall in 1979. Their acquisition of Hard Rock International in 2007 provides ready-made infrastructure for online casino expansion, given that Hard Rock already operates a successful online casino in New Jersey.
Potential for slots and table games on digital platforms
If approved, the Seminole Tribe could offer a comprehensive suite of digital casino games as early as 2025. Potential online offerings might include:
- Digital slots mirroring their extensive physical collection
- Virtual table games including blackjack, roulette, and craps
- Expanded poker options beyond current offerings
Seminole Gaming CEO Jim Allen has suggested the tribe might consider relinquishing its exclusive sports betting rights in exchange for permission to launch a casino app. This strategic shift acknowledges that online casino gaming typically generates substantially higher revenue than sports betting. Indeed, evidence from New Jersey shows iGaming operators generated $214 million compared to land-based casinos' $223.9 million in November.
Regulatory complexity and public concerns remain
Nevertheless, expansion would require an updated tribal-state gaming compact. Currently, online casinos remain illegal in Florida, as the 2021 compact adjustment allowing for online casino games was removed for further discussion. Therefore, any expansion would follow the "hub and spoke" model established for sports betting, connecting remote devices to servers on tribal land.
Certainly, critics argue this model creates a state-sanctioned monopoly. Simultaneously, legal challenges may arise similar to those faced by sports betting, though recent Supreme Court decisions have established clear precedent supporting tribal gaming rights. Given these points, the Florida Gaming Control Commission would ultimately regulate any expanded offerings, balancing economic benefits against responsible gambling considerations.
Illinois revives iGaming bills to address budget shortfall
Facing a significant budget shortfall, Illinois legislators have revived efforts to legalize online casinos through companion bills designed to generate substantial tax revenue. The state confronts a projected $3 billion deficit for fiscal year 2026, prompting renewed interest in expanding online gambling laws to address financial challenges.
Governor Pritzker supports online casino legalization
Governor JB Pritzker has deemed online casino legalization "worthy of consideration" as part of a potential solution to the state's budget woes. Since taking office in 2019, Pritzker has overseen substantial gambling expansion, including online sports betting implementation and the addition of six new casinos. His administration continues to pursue economic opportunities while prioritizing labor protections, as evidenced by his previous legislation requiring casino applicants to enter project labor agreements when seeking licenses. Pritzker's upcoming budget proposal may incorporate iGaming as a revenue-generating measure to help address fiscal challenges.
HB3080 and SB1963 introduced with labor protections
Senator Cristina Castro and Representative Edgar Gonzalez have filed Senate Bill 1963 and House Bill 3080 respectively, marking their third consecutive year introducing such legislation. Both bills propose a 25% tax rate on adjusted gaming revenue, an increase from the 15% rate in previous versions. The legislation would authorize each casino or horse racing track to offer up to three individually branded internet gaming skins. Moreover, the bills include notable workforce protections, stipulating that licensees cannot reduce their workforce by 25% or more from their initial licensing date[202]. The $250,000 licensing fee[202] creates a reasonable entry threshold, with estimates suggesting the state could ultimately generate up to $800 million annually in tax revenue.
Opposition from VGT lobby remains a hurdle
Nevertheless, the video gaming terminal (VGT) industry presents formidable opposition to online casino expansion. As a result, previous iGaming bills failed to advance beyond committee stages. The powerful VGT lobby represents thousands of terminals operating in bars and restaurants throughout Illinois. Critics, including the National Association Against iGaming, claim online casinos could cost Illinois $252.5 million in direct casino tax revenues and eliminate 4,733 jobs. Furthermore, labor groups such as the International Union of Operating Engineers Local 150 have expressed concerns that online gambling would "cannibalize existing gaming positions, mainly video gaming terminals". Currently, the Illinois Gaming Board has also voiced opposition, citing regulatory workload challenges.
Conclusion
As we look toward 2025, the race to legalize online casinos across the United States continues to gain momentum. Undoubtedly, the seven states that have already embraced regulated online gambling represent just the beginning of what could become a nationwide transformation. Maryland's education-focused approach with HB17, Virginia's cautious yet optimistic strategy through SB827, Florida's unique tribal-led potential expansion, and Illinois' budget-driven revival of iGaming bills all demonstrate different paths toward the same destination.
Despite varying approaches, these legislative efforts share common elements. Most compelling evidence shows that states consistently prioritize responsible gambling measures alongside revenue generation. Additionally, tax structures typically range from 12% to 25%, with funds often earmarked for specific public benefits such as education, problem gambling programs, or general funds.
The projected $35.21 billion market value by 2029 certainly provides powerful motivation for states facing budget shortfalls. Nevertheless, opposition remains significant, particularly from traditional gambling interests concerned about market cannibalization. Whether from VGT operators in Illinois or land-based casinos elsewhere, these established stakeholders highlight the complex balance legislators must strike.
At this point, it remains unclear exactly how many states will ultimately join the ranks of legal online casino jurisdictions before 2025. However, the economic pressure combined with growing public acceptance of digital gambling suggests the expansion will continue. After all, states cannot ignore the substantial tax revenue currently flowing to offshore operators or neighboring states with regulated markets.
For players and industry stakeholders alike, this evolving regulatory landscape demands close attention. The next few years will likely determine whether online casino gaming becomes a standard offering across most states or remains limited to select jurisdictions.